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Troubled ITV cuts jobs and costs Troubled ITV cuts jobs and costs
(40 minutes later)
ITV has announced it is cutting 600 jobs across its businesses, and plans to make other "significant" savings.ITV has announced it is cutting 600 jobs across its businesses, and plans to make other "significant" savings.
The announcement came as ITV reported a loss of £2.7bn for 2008 after a huge write-down in the value of its assets.The announcement came as ITV reported a loss of £2.7bn for 2008 after a huge write-down in the value of its assets.
About 150 of the jobs will be lost in Leeds, while several hundred are expected to go in London.About 150 of the jobs will be lost in Leeds, while several hundred are expected to go in London.
ITV, which has been hit by a sharp drop in advertising revenue, also said it planned to sell the social networking site Friends Reunited.ITV, which has been hit by a sharp drop in advertising revenue, also said it planned to sell the social networking site Friends Reunited.
In Leeds, ITV is closing its Kirkstall Road studio, which makes programmes such as Heartbeat and The Royal.In Leeds, ITV is closing its Kirkstall Road studio, which makes programmes such as Heartbeat and The Royal.
A large percentage of the job cuts in London will be "back office" jobs, according to the BBC's media correspondent, Torin Douglas.A large percentage of the job cuts in London will be "back office" jobs, according to the BBC's media correspondent, Torin Douglas.
'Challenging conditions''Challenging conditions'
Excluding the write-down in the value of its broadcasting and online assets, Britain's biggest commercial broadcaster reported a profit of £167m, down 41% on 2007.Excluding the write-down in the value of its broadcasting and online assets, Britain's biggest commercial broadcaster reported a profit of £167m, down 41% on 2007.
A large part of ITV's planned savings will come through cuts to its £1bn programme budget. It will be reduced by £65m this year.A large part of ITV's planned savings will come through cuts to its £1bn programme budget. It will be reduced by £65m this year.
Chairman Michael Grade said: "Current conditions in the advertising market are the most challenging I have experienced in over 30 years in UK broadcasting."
FROM THE TODAY PROGRAMME More from Today programmeFROM THE TODAY PROGRAMME More from Today programme
Chairman Michael Grade said: "Current conditions in the advertising market are the most challenging I have experienced in over 30 years in UK broadcasting."
ITV's advertising revenue has fallen in the current economic downturn.ITV's advertising revenue has fallen in the current economic downturn.
The company estimates its net advertising revenue for the first quarter of 2009 will be down by about 17% on the same period last year.The company estimates its net advertising revenue for the first quarter of 2009 will be down by about 17% on the same period last year.
Union angerUnion anger
ITV's cost-cutting measures include:
  • 600 jobs to go across its businesses
  • Annual savings of £155m in 2009, rising to £245m in 2011. That includes plans to reduce spending on programme-making by £65m in 2009, and by a further £70m in 2011
  • Plans to sell Friends Reunited. ITV bought the social networking site for £120m in December 2005. It is now valued at about £40m
  • Plans to sell its online business directory Scoot
  • Closure of ITV Local broadband service, which provides local news content, as a standalone business
  • Considering options for its SDN business, which leases space on Freeview.
ITV's cost-cutting measures include:
  • 600 jobs to go across its businesses
  • Annual savings of £155m in 2009, rising to £245m in 2011. That includes plans to reduce spending on programme-making by £65m in 2009, and by a further £70m in 2011
  • Plans to sell Friends Reunited. ITV bought the social networking site for £120m in December 2005. It is now valued at about £40m
  • Plans to sell its online business directory Scoot
  • Closure of ITV Local broadband service, which provides local news content, as a standalone business
  • Considering options for its SDN business, which leases space on Freeview.
Gerry Morrissey, general secretary of broadcasting union Bectu, rebutted ITV's claims that the cutbacks were as a result of the economic downturn.
The internet has broken the traditional TV advertising model Torin Douglas, BBC media correspondent What is the outlook for ITV?Send us your commentsThe internet has broken the traditional TV advertising model Torin Douglas, BBC media correspondent What is the outlook for ITV?Send us your comments
Gerry Morrissey, general secretary of broadcasting union Bectu, rebutted ITV's claims that the cutbacks were as a result of the economic downturn.
"This is because of the mismanagement of ITV and has been going on for longer than the current credit crunch," he said."This is because of the mismanagement of ITV and has been going on for longer than the current credit crunch," he said.
He claimed that the group's management had been more interested in looking after shareholders and senior management, rather than staff and viewers.He claimed that the group's management had been more interested in looking after shareholders and senior management, rather than staff and viewers.
He also accused ITV of giving up on its public service broadcasting remit after the broadcaster said it was going to move more towards popular entertainment programmes.He also accused ITV of giving up on its public service broadcasting remit after the broadcaster said it was going to move more towards popular entertainment programmes.
Uncertain tradingUncertain trading
The broadcaster said that the targets it had set in 2007 were "no longer appropriate". The targets had assumed growth in UK television advertising, but there had since been an "unprecedented deterioration in the global economic outlook", the broadcaster said.The broadcaster said that the targets it had set in 2007 were "no longer appropriate". The targets had assumed growth in UK television advertising, but there had since been an "unprecedented deterioration in the global economic outlook", the broadcaster said.
ITV is closing its studio in Kirkstall Road, Leeds
But the BBC's media correspondent Torin Douglas said the rise in online advertising had also been a factor.But the BBC's media correspondent Torin Douglas said the rise in online advertising had also been a factor.
"The internet has broken the traditional TV advertising model," he said."The internet has broken the traditional TV advertising model," he said.
ITV now plans to deliver annual savings of £155m in 2009, rising to £245m in 2011.ITV now plans to deliver annual savings of £155m in 2009, rising to £245m in 2011.
However, Mr Grade insisted that ITV's targeted audience share would remain unchanged.However, Mr Grade insisted that ITV's targeted audience share would remain unchanged.
In 2008, ITV1 achieved an audience share of 17.2%, down from 17.9% in 2007. ITV's digital channels accounted for 4.8% of total viewing share last year.In 2008, ITV1 achieved an audience share of 17.2%, down from 17.9% in 2007. ITV's digital channels accounted for 4.8% of total viewing share last year.
ITV said it was difficult to predict its future revenues and warned that trading in 2009 remained uncertain.ITV said it was difficult to predict its future revenues and warned that trading in 2009 remained uncertain.
The broadcaster said it would not pay a dividend in 2009.The broadcaster said it would not pay a dividend in 2009.